This document discusses the options of using a limited company or umbrella company for contractors. A limited company allows contractors to be company directors and take home up to 84% of their income, but requires more paperwork. An umbrella company provides employment rights for contractors through PAYE and is ideal for those new to contracting or who may not stay long term, as it has minimal paperwork but contractors take home up to 80% of income. The document provides examples of take home pay under both options to help contractors choose the best structure.

1. Which engagement option should your contractor choose?
Helping your contractors to make the right choice between their own Limited
company or Umbrella employment is important
What is a Limited Company?
• A Limited company is often referred to as a Personal
Service Company (PSC).
• The contractor owns the shares of the company.
• The contractor becomes a director of the company.
Ideal for:
• Contractors who wish to build a long term career in
contracting.
•
of being a company director.
• Contractors working on higher rates (more than
£120 per day).
•
up to 84% of turnover.
• Same day formation with optional same day bank
account opening.
• Dedicated expert accountant, with free face to face
meetings.
• Access to online award winning bookkeeping
software.
• IR35 experts and tax advisors .
What is an Umbrella Company?
• An Umbrella company employs contractors,
providing them with statutory employment rights.
• An Umbrella company employs contractors for
their assignment work leaving them to focus on
delivering a great service to the client.
• An Umbrella company pays its employees through
the PAYE system.
Ideal for:
• Contractors who want the comfort and continuity
of employment.
• First time contractors who may not stay in
contracting for long(less than one year), or are
between permanent jobs.
• All contractors.
• One tax code - consolidated earnings for
all assignment work.
• Statutory employment rights (including sick pay,
maternity pay, national minimum wage, holiday
pay, etc).
• Pension auto-enrolment.
• Quick and easy joining (less than ten minutes).
• Minimal paperwork.
• Personal account manager.
• Consistent and accurate pay.
We are social
G87(1.1-04/16)
Take home 80% of
assignment income
Take home up to 84% of
assignment income

2. Hourly Rate Paye take home pay* Umbrella take Limited Company
home pay* take home pay**
£10.00 £295.00 £322.89 £335.00
£12.50 £353.99 £396.27 £412.00
£15.00 £412.60 £456.03 £489.00
£17.50 £471.22 £515.78 £566.00
£20.00 £529.84 £575.53 £643.00
£25.00 £643.55 £695.04 £796.00
£30.00 £743.54 £801.11 £908.00
£40.00 £943.53 £1,004.98 £1,133.00
£50.00 £1,143.51 £1,208.84 £1,357.00
£80.00 £1,658.85 £1,735.83 £1,977.00
£100.00 £2,030.66 £2,116.71 £2,425.00
*Assumptions 1100L tax code
Rate is Limited Company/Umbrella Rate
40 hours per week
£100 allowable expenses included
£27.50 margin
**Assumptions 1100L tax code
40 hours per week
£100 expenses plus £118.80 Accountancy fee per month
FlatrateVAT13.5%
We are social
To refer your contractors to Orange Genie either….
Visit: www.orangegenie.com • Call: 01296 468 483 • Email: info@orangegenie.com